I Was Phished (and I don't mean seduced by Trey Anastasio)

We've all gotten the e-mails for Viagra and penis enlargers, and from the poor deposed Nigerian royalty asking us to cash his bank check in exchange for which he will give us a percentage (ok maybe only I get the ones for Viagra and penis enlargers). Only a rube who fell off the turnip truck would respond to these.

But I, who consider myself a very Internet-savvy guy, got phished this morning.

Here's how it works. You get a perfectly legitimate-looking e-mail from a web site with whom you have an existing account, like eBay, Amazon, Yahoo, your bank, etc. It catches your attention with some alarming statement such as a missed payment or compromised account security, and has a link for you to click to log in and fix it. So you do. It presents a page that looks for all the world like the site you're accustomed to. You log in with your name and password like you always do. And then you see something that isn't right, and you realize you've just given away your password.

In my case, it was eBay. A few days ago I sold five dead notebook computers. All the buyers paid me. I boxed the computers up and shipped them off. But this morning, I got an e-mail on my Yahoo account that was a message forwarded from eBay from the buyer of one of the computers. It said, essentially, "I paid for this several days ago I've gotten no shipping information from you what gives?" It looked for all the world like every other message e-mail I've ever gotten from eBay as the result of an auction, with the familiar logos, fonts, and color schemes. It even showed a picture of the computer being auctioned.

So I clicked the "respond" button in the e-mail, which took me to eBay like it always does. I logged in with my eBay ID and password, and then saw a screen asking me to confirm my identity by entering in the credit card number used to support this eBay account.

That's not right.

Suddenly the red light went on.

Phished! Shit! Piss!! FUCK!!!

I IMMEDIATELY went to eBay (the REAL eBay), logged in, changed my password, and logged back out. I logged back in with the changed password, checked my messages within eBay, and of course there was no such message.

I then went back to the fake e-mail and used my mouse to hover over the "respond" button. Doing this lets you see the URL address that the link will take you too. Needless to say, it showed an address that was NOT eBay.

I've previously warned Maire Anne and the kids about phishing, and shown them this trick of using the mouse to hover over a link, but this one caught me. The safe thing to do is NEVER click on these links within an e-mail, and instead ALWAYS go directly to the web site (eBay, PayPal, Amazon, whoever) and check your account status.

So now, with my guard back up, I'll try and relax. Maybe listen to "Sample in a Jar."

My Annual SUV and Snow Tire Rant

As we have our first snow of the season (well, there was that freak Halloween storm, but Boston saw virtually none of it), and as I had my annual experience of driving carefully in the right lane of Rt 95 and having an SUV blow past me doing 80, only to see it off in the median strip a few miles ahead, it must be time for my annual SUV and snow tire rant.

Ah, how things have changed from six years ago. I see far fewer Ford Expeditions being used as single-passenger commuting vehicles, and not all that many being used as soccer mom cars. This is good.

Don’t get me wrong. I’m not one of the zealots who ran around surreptitiously pasting I’m Changing the Climate! bumper stickers onto SUVs. I don’t view them as a social evil. How could I? I’m a car guy. But I’ve always felt that the public was sold a bill of goods that these were vehicles with the right balance of features to be good daily drivers.

Look. Any car is a compromise of cost, performance, dry handling, snow handling, safety, space, cache, fuel economy, fun, and other factors. Every once in a while one of these levers gets bumped up to eleven in importance, and that throws a car out of balance. Need to carry huge quantities of people? 15-passenger van. Fastest squirt for the least bucks? Corvette ZR1. Think you need to drive over boulders? Hummer. Gas goes to five bucks a gallon? Prius. Gas goes to five bucks a gallon but you don’t want to shell out 20 large for a new car? Twelve-year-old Geo Metro. But are any of these a reasonable compromise for the myriad of things that most people need daily driver for? Actually, of these, the Prius comes closest, but I digress.

For many years, for many families, the solution to the equation of balance was the good old-fashioned American station wagon. It swallowed kids and cargo even if it came up was woefully short on handling, fuel economy, and cache. When Chrysler popularized the “garage-able” minivan with a flat floor, a walk-though interior, and seating for seven in the 1980s, they sold like hotcakes because families thought this represented the right balance. Plus, compared with a big rear wheel drive station wagon, the minivan’s front wheel drive was perceived by many to be better in snow. We’ll get back to this in a moment.

During the primacy of the station wagon and the ascendancy of the minivan, it’s not that people weren’t driving four wheel drive vehicles. Pickup trucks, Jeeps, and Suburbans had been available for 50 years, there were two-door specialty vehicles like the Ford Bronco and Chevy Blazer, and Subaru had quietly built a reputation for four wheel drive passenger cars and wagons. But the Subarus were comparatively small, and the other vehicles were, well, trucks; they certainly weren’t soccer mom cars. However, when Ford introduced the Explorer in 1990, it lit the match that started the SUV craze because of its widely-reported car-like ride and handling, the presence of four doors instead of two, four wheel drive helping to protect you from getting stuck in the snow, ample cargo space, a high vantage point (I’ve never quite understood the popularity of this), and the well-marketed aura of safety. The combination of these factors resulted in first-year sales of over 420,000 units. Chevrolet, in response, made sure that the next version of their Suburban introduced in 1992 was less of a truck and more “car-like.”

Now, I’ve got nothing against SUVs. I’ve owned six Suburbans and a Toyota Land Cruiser. For years I’d buy one in the spring, sort out any issues it had, use it to take the family to Nantucket, then sell it in the fall. I preferred the big, truck-like pre-1992 ones with a bench seat across the front. Those had seat belts for nine people. I could go on vacation with my family of five and my brother-in-law’s family of four and have all of us pile in, belt in, and drive out on the sand to go fishing. When I found a rust-free ‘Burb that was a steal, I held onto it for seven years. Then I had the Land Cruiser for three years. But I only registered them during the summer. Neither Maire Anne nor I ever wanted to be driving a vehicle that big that got such poor gas mileage the rest of the year, four-wheel drive or no.

I suppose it’s understandable that, while gas was cheap, many families thought that SUVs had the right balance of features. I just was never one of them. When my kids were younger, I always thought that, unless you live in a climate where there’s so much snow and you live on such an unpaved boulder-strewn road that four-wheel drive and high ground clearance are true necessities, the minivan is a better compromise. It’s a lighter vehicle so fuel economy is better, and the layout with the flat floor makes it much easy to put a third row of seats into. It’s only the largest SUVs that have a third row of seats, and now you’re driving six thousand pounds. Now that the kids are out of the house, a small station wagon fits the bill for me.

Of course, the size and weight of full-sized SUVs, instead of being a detriment, was marketed as a safety factor, and in particular was cynically marketed toward women who were manipulated to feel that they and their children “just weren’t safe” unless they were driving a three-ton vehicle. With a wink and a nod, the message was “you and I both know that in a full-sized SUV you’re bigger than anyone else; you’ll crush them before they crush you.” I strongly object to this perversion of safety. I’ll go further. I think it’s unethical to market and sell (and, perhaps, to buy) a vehicle if the intent is for your increased safety to come at the expense of someone else.

One can dissect the “how safe are SUVs” question along many axes. There are data that show that SUVs have higher occupant fatality rates than cars, and that a very high percentage of rollover fatalities occurs in SUVs because of their high center of gravity. The point is that safety is more complex than simply being the biggest vehicle on the road.

Factoring into this is the misconception of how much safety four wheel drive actually buys you. Many folks living in New England will tell you that, when it’s snowy, SUVs are the cars you’re most likely to see spun off into the median strip. Not 4wd pickup trucks, mind you – SUVs. You know why? Because most people driving pickup trucks do not confuse them with sports cars, whereas many people driving an SUV seem to think that this car that is top-heavy and does not handle particularly well in the dry suddenly transforms into a freaking Lamborghini when it is slick out.

This is important. Let’s break it down further. Driving in snow has three main components: 1) getting underway, 2) keeping underway, 3) turning, and 4) stopping. I will certainly agree that four-wheel drive helps you with the first. In deep snow, it will help you with the second. But it does not help you with the third or the fourth. The scariest vehicle I ever drove in the snow was a gigantic 1993 Ford F350 four-door pickup with four-wheel drive. Most people would look at the truck and think, oh baby, nothing could stop this thing in the snow. And that’s about right… nothing could stop it. With the four-wheel drive and high ground clearance, snow banks posed little problem while parking. Hell, other cars posed little problem while parking. But if you were headed downhill on a slick surface, heaven help you. All that weight created a lot of momentum. The car wouldn’t turn. The car wouldn’t stop. It was frightening.

It’s the lack of direct warning and feedback that’s a problem. Before the 80s, nearly all American cars had rear wheel drive and a big heavy engine in the front. With so little weight over the drive wheels in the back, these cars were not great in the snow. People who lived in snowy climates understood that you had to put snow tires on the back wheels (preferably on all four wheels) and weight in the back, and then they worked pretty well. Most folks over a certain age remember how much fun it used to be to take a rear wheel drive car to an empty parking lot, hit the gas, and have the back end spin around. Wheeeee! Wheeeee! This was, in fact, how you learned to control a car in a skid. You’d practice it. They even taught it in driver’s ed. “Turn your wheels in the direction of the skid.” That never made any sense either. You had to feel it. But that twitch of the back end in a rear wheel drive car – the tail starting to slide around – is a canary in a coal mine, telling you that conditions are slick. So you know. So you back off.

When Japanese cars started selling in droves in the 70s and 80s, most of them had front wheel drive, putting the weight of the engine over the drive wheels. This improves traction in snow. Plus, since the front wheels do the steering as well as the propelling, when you hit the gas on a front wheel drive car in the snow, the back end stays where it is; it doesn’t swing out like on a rear wheel drive car. Most people prefer that. These two factors – combined with the introduction of so-called “all-season radials” – form the basis of the conception that front wheel drive cars are “better” in the snow. It’s not that they’re “better;” it’s that, all other factors being equal, they have a weight distribution making it less likely that the back end will come around. The problem is that your coal mine has lost its canary. I like that twitch in the back end of a car that tells me “it’s slippery; be careful.” In contrast, in a front wheel drive car, often the first indication you have of lack of traction is when you try to turn, and instead of the front wheels biting in, the car just slides into something.

This by-the-time-you’re-sliding-it’s-too-late problem is magnified in four-wheel drive cars. They certainly do better at the getting-you-underway part. By propelling all four wheels, they do better at the keeping-you-underway part, and if you have to drive a lot on unplowed rutted roads, this is genuinely useful. But they do nothing special at the turn-in part or at the stopping-you part. Antilock braking systems (ABS) and traction control certainly help, but all other factors being equal, when you’re in an SUV and you need to stop in slippery weather, you’re in a bigger heavier vehicle, you have more momentum, and that makes you worse off – not better off – than if you were in a smaller lighter vehicle. Add to that the fact that the four-wheel drive, the ABS, and all that steel around you lull many people into a false sense of security.

I’ve been driving BMWs year-round for 30 years. In the winter, I’ve always put snow tires (usually Bridgestone Blizzaks) on all four corners. When I used to drive a BMW 2002 over the winter, I’d put studded snow tires on all four corners. These days I’m driving a 2001 325XiT all-time all-wheel-drive wagon. It came equipped with all-season radials. Whether ASRs are fine in the snow depends on the conditions. If they're new all-season radials and the snow is light, they may be fine. But all factors being equal, they'll never give the bite of a real snow tire whose rubber compound and tread are designed specifically for snow. In the fall, I decided to look around for a set of steel wheels and snow tires. In addition to wanting the snows, I wanted the steel wheels in order to keep the 325's nice alloy wheels from being destroyed over winter potholes. I found a set of steel wheels with Continental snows advertised cheaply on Craigslist in “like new” condition. But when I checked them out, one pair of tires had 8/32” tread left (good) but the other pair had only 5/32” (nearing the end of their useful life). You know how it goes… I was there… they were cheap… I bought them and threw them on the car, putting the better set on the back and the worse set on the front to equalize the wear.

Today was my first chance to try them, and the all-time all-wheel-drive 325XiT wagon, out in the snow.

Horrible.

It reminded me of that old F350 pickup. The car, with its all-time all-wheel-drive, had no problem going up and down hills, but stopping on slick surfaces and negotiating turns on unplowed entrance ramps were just terrible. New snow tires, at least for the front, are clearly in order.

So, remember: The 4wd in your SUV may help you to get out of the plowed-in parking space, but without tires (preferably snow tires) with decent tread, it’s very easy to be surprised when you need to turn or stop. And even if you have new Blizzaks... slow down, will ya?

Refinancing Madness

There are times, when I'm doing my Zen-in-the-garage thing, focusing on the task at hand (which, this weekend, is replacing the driveshaft in the '85 635CSi), I feel that, at my core, I am a mechanic, a guy who likes to work with his hands and get things done.

Then, when I'm sitting in a coffeehouse, waiting my turn to do my singer/songwriter thing at an open mike, and marveling at the talent, craft, and human interaction in this glorious little corner of the world, I know that I am, at my core, an artist.

And when I'm at work, doing my software / system / unexploded ordnance / geophysics thing and integrating some new sensor, I'm totally at ease with the role that engineering has played as the core of my professional life.

As someone once denigrated Walter Mondale for telling one too many special interest groups that he felt their cause "to his core," perhaps I just have a really big core.

But the engineering me is the part that wants to dig down and find out the answer to things. Although I am by no means a financial whiz, I've developed a high degree of facility with Excel. When our first son Ethan was approaching college, I needed to understand how the hell I was going to pay for it. Despite the number of web-based college savings calculators, I found them all totally unsatisfactory. What was required was a spreadsheet that combined past money (savings), current money (cash flow), and future money (loans) and rolled them together along the projected college costs (indexed for inflation, of course), any merit scholarships or other grant aid, Stafford loans, a time-frame for drawing-down the savings, and an annual contribution from the child, and calculated the difference between the college bill and what you could actually pay. This produced "the answer" -- the amount that you or your child would need to borrow to pay the bill. Then and only then could you begin to wrap your head around the question of how to come up with this amount ("Plus" loan, refinancing the house, etc). Oh, and I needed to build in the fact that we have three kids, two of whom overlapped in college for two years and one who doesn't. It was truly The Spreadsheet From Hell. Nothing like it existed, anywhere. I had friends ask me for copies because it was the only sane way to even begin to answer the question "how the hell am I supposed to pay for this?" By using it, I could look the beast in the face and determine that, if all three of my kids went to in-state schools, we could afford it, but if all three wanted to go to private schools, the "delta" was so large that we'd need to refinance the house into retirement, and I wasn't willing to do that (and if you think that makes me a bad person, that's fine). It was a joy coming up with something I regarded as "the answer," in which I understood every step.

Fast-forward to this week. Interest rates have fallen to the point where I can roll my already-incredibly-low 4.875% 15-year mortgage and my 5.5% home equity loan (what I used to finance the construction of the garage) together and refinance them both with a new 15-year note at a bottom-of-the-grand-Canyon-like rate of 3%, and either reduce my monthly payments and stretch out the term of the loan, or continue paying the same monthly amount to pay the loan down quickly and save a boatload of interest, or some combination.

And then, of course, the immediate question: Is it worth it? When people refinance, they tend to overly fixate on lowering the monthly payment without realizing that, by restarting the loan, they push out the end date, and thus are paying a ton of extra interest. What are the numbers? What are the tradeoffs? What is the answer?

Spreadsheet time.

As with the college exercise, there is no one on-line mortgage calculator that does everything you really need, which is:

--Takes your current mortgage

--Looks at the outstanding balance

--Calculates the interest you have yet to pay

--Does the same for your home equity loan (different loan parameters than the mortgage)

--Calculates the total current payment, total outstanding balance, and total outstanding interest

--Allows you to try out new loan parameters (interest rate and term)
--Calculates the new monthly payment

--Calculates the monthly savings

--Calculates and forces you to look at the motherload of extra interest you're paying with the newly restarted loan

--Allows you enter an extra amount of principal to pay every month to see if, by continuing to pay your old monthly value every month to shorten the term of the loan and save on interest, you actually save money in the end or not.

It took a while, partly because it turns out that the function you need in Excel to calculate the interest between two loan payments (such as from now 'till the end of the loan) is called CUMIPMT, and it is not supported in Excel 2000-2003 unless you've installed the Analysis Pack. I looked but, not surprisingly, could not find the set of ten-year-old Microsoft Office CDs. Fortunately my other computer had a newer version of Excel on it.

"The answer" is startling.

Between the mortgage and the home equity loan, the outstanding balance is about $110k. The current monthly payment is about $1700. Both loans only have about five years left on them, but even in that short time, there's about $20k of interest to be paid. So, again, the goal is to see what the trade-off is between the lower monthly payment and the increased interest over the life of a new loan.

Below are real rates, available today (1/13/2012) from www.penfed.org.

A 30-year loan at 3.875% drops the monthly payment by about $1200, but accrues a whopping $60k increase in interest.

A 20-year loan at 3.75% drops the monthly payment by about $1050, but creates about a $29k increase in interest.

A 15-year loan at 3.0% drops the monthly payment by about $950, with only an $8k increase in interest. In other words, in about eight months, in comparison to doing nothing, the 15-year loan pays for itself.

Wow. 

Then I looked at the effect of paying down the principal faster. If I take the 15 year loan at 3% and merely continue to pay my old $1700 monthly payment, the effect is also startling -- the loan is paid off in six years (about what is remaining now), but instead of an $8k increase in interest, there's about an $9k decrease. In other words, if I refinance, I can pay what I'm paying now and save about $9k over the next six years, or if I lose my job and my income is interrupted, I can let the term of the loan be 15 years, pay about a grand less every month, and the $8k privilege for this risk reduction will be paid back in eight months.

Want to see how quickly I can pull this trigger on this?

Next time I'm in the garage, I will still be blissfully focused. Next time I am at a coffeehouse, I will still be transfixed by the use of art as the mechanism for human connection. But in this moment, my engineer is dominant, I completely understand this mortgage tradeoff, and I am grateful for this small clear thing.

(Thanks to my friend Gary Mercier at work for mentioning the idea of refinancing as a method of risk reduction -- that's what started the wheels turning.)